ONGC, GAIL should not be on your watch list: Sandip Sabharwal

What should one do when it comes to ONGC? If crude price is going up, share price should also go up?
Some of these stocks like ONGC,

, etc, should just be removed from the screens and should not be monitored at all. These are very inefficient companies which have not been able to take care of either upswing in the market or when they have generated huge cash flows to invest in a manner where value will be created for shareholders. For example, ONGC makes so much investments overseas, basically destroying wealth for shareholders and nothing much has come out of OVL. So there is nothing much in this. When crude prices are at such high levels and the stock is languishing, what will happen when crude actually starts correcting at some stage? I think people should just not track these companies in my view.

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Why did the cement pack fall just because announced a capex expansion?
It is actually quite intriguing because obviously a company with say $125 million tonnes installed capacity would like to expand by 20 million tonnes over four-five years just to take care of the normal growth because if the economy is going to grow at 6-7%, cement demand is going to grow at 7-8% or more then they need to sustain their market share. It is surprising to see why they fell, as there have been pressures and to that extent, the stocks had not fallen so much and the positivity around that Ambuja, ACC selloff also helped the stock sustain at higher levels.

So it is more to do with near term profitability concerns and possibly on the back of the minds of some investors it might be there, like there has been intervention in steel, if cement prices keep on going up there could be some government intervention here also. So I think those could be some concerns, in fact I was also very surprised because they announced some capex which will be funded just from their cash flows. Why should the stock have fallen so much but that said I would think around 5000-5200 levels it will be a good buy for long-term investors.

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